DTEGY vs. TU: Which Stock Is the Better Value Option?

Investors interested in stocks from the Diversified Communication Services sector have probably already heard of Deutsche Telekom AG (DTEGY) and Telus (TU). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.

Currently, both Deutsche Telekom AG and Telus are holding a Zacks Rank of # 2 (Buy). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that these stocks have improving earnings outlooks. But this is just one piece of the puzzle for value investors.

Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their current share price levels.

Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.

DTEGY currently has a forward P/E ratio of 13.88, while TU has a forward P/E of 23.36. We also note that DTEGY has a PEG ratio of 1.34. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. TU currently has a PEG ratio of 2.39.

Another notable valuation metric for DTEGY is its P/B ratio of 0.94. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, TU has a P/B of 2.34.

These are just a few of the metrics contributing to DTEGY's Value grade of A and TU's Value grade of C.

Both DTEGY and TU are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that DTEGY is the superior value option right now.

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Deutsche Telekom AG (DTEGY) : Free Stock Analysis Report
 
TELUS Corporation (TU) : Free Stock Analysis Report
 
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